Gross: 'Inappropriately flat' yield curve threatens US profit growth

Central banks need to take action

Bill Gross has warned that the "inappropriately flat" treasury yield curve is hurting credit markets and could lead to lacklustre profit growth in the US.

The manager (pictured) of the $1.4bn Janus Global Unconstrained Bond fund said "stubborn" central banks have failed to recognise the transition to a finance-based economy over the past four decades. He said: "Capitalism would not work well if Fed funds and 30-year treasuries co-existed at the same yield, nor if commercial paper and 30-year corporates did as well. Investors would have no incentive to invest long term. "My primary thesis remains that capitalism does not function well, and profit growth is stunted, if short-term and long-term yields near the zero bound are low and the yi...